The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. For example, the Kirkland Lake Gold Ltd. (TSE:KL) share price has soared 108% in the last year. Most would be very happy with that, especially in just one year! It’s also good to see the share price up 35% over the last quarter. Kirkland Lake Gold hasn’t been listed for long, so it’s still not clear if it is a long term winner.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Kirkland Lake Gold was able to grow EPS by 73% in the last twelve months. The share price gain of 108% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.
It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of Kirkland Lake Gold’s earnings, revenue and cash flow.
A Different Perspective
It’s nice to see that Kirkland Lake Gold shareholders have gained 109% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 35% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Kirkland Lake Gold by clicking this link.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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